After a year of record sales, Renault has posted 2016 net income of EUR3,543m (+19.7%). A strong set of annual financial results came in spite of currency headwinds and a lower contribution to the bottom line from Nissan.
Groupe Renault reached a new sales record in 2016 with 3.18m vehicles. The company said that volume and market shares were up in all regions.
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Group revenues in 2016 were EUR51,243m, up 13.1% from 2015. This represents growth of 17.0% at constant exchange rates, Renault said.
Group operating income was up 50.9% in the year to EUR3,283m (+50.9%).
“After very strong results in the first half of the year, Groupe Renault confirmed its performance by establishing a new record for the year. We outperformed the targets of the “Drive the Change” plan, launched in 2011, both in terms of growth and profits one year in advance. This success rewards the hard work of all Group employees,” said Carlos Ghosn, Chairman and Chief Executive Officer of Renault.
Continuing efforts to reduce costs positively contributed for EUR184m, Renault said, taking into account a significant increase in R&D expenses. The mix/price/enrichment effect was positive at EUR115m, ‘in particular due to the impact of our new models and price increases in some emerging countries’.
Raw materials continued to have a very favourable effect of EUR331m.
However, the company said the currency impact was highly negative at -EUR702m, ‘reflecting firstly the depreciation of the British pound and the Argentinean peso’.
Nissan’s contribution, though large, was down at EUR1,741m in 2016, versus EUR1,976m in 2015 (Nissan’s results were hit by the high yen).
AvtoVAZ’s contribution for 2016 was still negative at -EUR89m, but much smaller than the negative EUR620m recorded in 2015. Renault said the improvement stems mainly from a sharp reduction in impairment losses recorded in 2016 compared with 2015, and partly, from the company’s improved operating performance.
Outlook
In 2017, Renault said the global market is expected to record growth of 1.5% to 2%. The European and French markets are expected to increase by 2%.
At the International level, the Brazilian and Russian markets are expected to be stable. On the other hand, Renault said, China (+5%) and India (+8%) should continue their momentum.
Groupe Renault is aiming to increase revenues group operating profit in 2017 and generate a positive automotive operational free cash flow.
The company also said it will present in 2017 a new strategic plan 2017-2022, with an ambition to reach EUR70bn (at constant exchange rates) in revenues and 7% operating margin at the end of the plan, while maintaining a positive operational automotive free cash flow every year.
